It’s Domaining 6.0 & It’s Is All About Branding

I promised I would be writing a few post this week about the new gTLD’s, the current state of the domain industry where its has been and where it’s going.

As far as I can see we are now in the age of Domaining 6.0

Before trying to figure out where we are going, lets do a quick recap of where we have been.

Domaining 1.0

This goes way back, before ICANN, before Google, back to the day when domain names were free.

It wasn’t until 1995 that Network Solutions was allowed to charge to register or renew a domain name and the charge was $100 for two years.

After a lawsuit, the fee was dropped to $70 for two years in 1997.

So until 1995 the entire universe of domains were available; Yes all ending in .com, and they didn’t cost a penny to register or renew.

There were just a handful of people who even knew what the internet was, even less what a domain name was , or even how to register one.

Those who knew what the internet was, what a domain name wand how to register one,  had a once in a generation opportunity to own the internet yet not many registered more than a few free domains.

There was no way to monetize any traffic to the extent the was any.

Domaining 2.0

The late 1990′s some people woke up to the fact that domain names were virtual estate.

In 1999 Network Solutions monopoly over domain internet registrations ended, other registrars came online and the domain world changed when our friends at Tucows lowered the price of a domain name registration/renewal to $10 only one year required,  in January 2000.

People saw how business were built using just a great vanity phone number like 1-800-flowers, and realized that a whole business success could hinge on a great domain.

The fact that an exact match domain could create a tremendous business opportunity fueled a growing number of domainers who sort to register and buy domain names for resale.

Monetization of domain names was very limited except for adult domains, which monetized like crazy.

Domaining 3.0

This was the period of the dot com crash of early 2001/ to mid 2003 in the domain world and in the financial world, the perceived value of the internet as a business model and therefore .com domain names as well greatly diminished by not only  domainers, but by investors, the stock market and the general public.

Company’s invested and lost hundreds of millions, billions of dollars in the .com bubble.

Although domain names could be had for $10 a year renewal fee the vast portion of domains especially the older domains were still at Network Solutions and still $70 for 2 years.

Domains started dropping like flies.

Some really smart domainers who had the guts to against the entire market, sweep in and bought everything they on drops and privately believing that the  trend would reverse and that domain name would not only be invaluable for a presence on the web.

Monetization of domain names was very limited except for adult domains

Domaining 4.0

The monetization era started with Goto.com and FindWhat.com.

Goto.com got acquired by Overture in 2001,  and then Overture got acquired by Yahoo in 2003

Google acquired Applied Semantics  in April 2003 shortly thereafter that is when the true era of monetization occurred and the subsequent boom in domains values and sales occurred.

For some 6 years, a fortune of money poured into the domainer channel from parking and sales.

Monetization of domains led to sales, not only for the great “bang on category killers” domains but for typo traffic domain as well.

Parking revenue drove domain sales and domain sales drove more domain purchases.

Live Domain Auctions were measured in the tens of millions, just millions.

Domaining 5.0

Monetization started to decline and then fell off the cliff.

We can dedicate a whole series of posts to the cause for the decline in Monetization but for sake of keeping it short lets cite a few factors including, Google’s Smart Pricing, Yahoo Quality Score combined with Google squeezing the domain channel getting the same traffic while reducing payouts to domainers, and Yahoo’s failure to stay competitive in market as well as the overall recession.

.Brands started enforcing their trademark rights and UDRP’s and lawsuit’s followed taking away a lot of the typo traffic market, which in turn took more money out of the sales channel.

Domainers and end users were still buying a lot of domains for six and seven figures.

SEO guys jumped in knowing that a keyword rich domain, even non-com’s could get you ranked in the search engines. The aftermarket for .net and .org’s rocked and we saw six figure sales for such domains in the aftermarket.

Domaining 6.0

So here we are in 2012 and things have changed again.

Google algorithms change like the wind leaving SEO guys trying to figure out how to game the system keyword rich domains are selling but at a much lower rate and non-.com’s at a much lower prices.

Sales are brisk but the average prices have come down.

Look at the DnJournal.com year to date sales chart.

I mean really go check it out now and come back.

I’ll wait.

So we are half way through the year and you will see just one domain selling for seven figures in 2012, and that was at $1,000,000 even.

Only one other domain name has sold for $500K – $1M and that one was at an even $500K.

Only 4 domains have sold between $200K-$499K

Now go look for 2011

3 sales of $1M or more.

9 of $500k or more.

18 were between $200K-$500K

Now look for 2010,

7 sales of $1M or more and two for over $5 Million.

There were 8 Sales between $500K-$825K.

12 between $300K- $450K

16 between $200K -$300K

You get the idea.

Its not that the resale market is dead.

So far in 2012,  there are over 25 sales between $100K- $325K

There are a lot of sales between $20k-$100K and actually it still takes $42,500 to make the top 100 list for 2012.

So stuff is selling and the  resale market is far from dead, but the top of the market has dried up to a large extent.

Look at the weekly Sedo.com report or the Afternic.com report in general, we publish it every week.

You will see a steady weekly $2.5 million in combined domain name sales but over 90% of the transactions priced $3,000 or under.

That’s what the state of the resale market is for the vast majority of domainers.

Lets look at Sedo figures for 2011:

“47% of traded domain names during 2011 were sold at prices at or under $500.”

Only 6% of sales were $10K or more.

So where do we go from here?

We know that we are facing a world with 500-1,500 new gTLD extensions in the next few years, from the 22 we currently have.

Choices for consumers are going to increase for some verticals exponentially, will all domain prices hold steady?

Will a New York Personal Injury Lawyer that might pay $10K for NewYorkPersonalInjuryLawyer.com in 2012, still pay that much when he could register for $50-$100 anyone of a number of new possibilities like NewYorkPersonalInjury.Law, NewYorkPersonalInjury.Lawyer,  NewYorkPersonalInjury.Attorney,  NewYorkPersonalInjury.Esq or NewYorkPersonalInjury.Legal or even PersonalinjuryLawyer.NYC?

We can and have argued for now a couple of years what the effect of these new gTLD’s will have on the value of existing domains and extensions.

The truth is as we have said from day one of the announcement that these new gTLD’s might be coming, is that NO ONE Knows what will happen when the market expands from 22 TLD’s to 522 or 1,022.

But there are some hints out there.

The biggest domainer of all applied for 54 new gTLD’s committing $60 million towards the process.

Google applied for over 100 new gTLD’s

What Happens if Google gives away domain name for free in 2014.

Yup just about 20 years to the date, we maybe back to where it all started, with free domains.

What happens to the $10K domain NewYorkPersonalInjuryLawyer.com when someone can register NewYorkPersonalInjuryLawyer.Web for free?

In the world of 1,000 new gTLD and what we have already started to see is for domainers is going to be all about branding.

It’s not about the domains or the extension but about brandable domains which would give an end user an memorable internet presence.

If you read Techcruch.com regularly you will see a lot of companies being funded by big VC firms in extensions like .Me, .Tv,  .Ly, .It .Es and among others.

As more and more brandable and intuitive extensions come on board, its going to be even more about brand potential.

Look at this week’s top sale on  Sedo.com

Connect.to

Last week’s ArtDeco.com

The week before, Cruise.me

All highly brandable intuitive domain names.

When 500, 1,000 1,500 or more new gTLD’s are on the market sometime in the next few years, the internet will become what was a one trick pony of .com to one of infinite choices and possibilities.

Highly brandable intuitive domains will continue to be in huge demand.

When seeing hundreds of new extensions all hitting the market, Internet users won’t just be confused, there heads will be spinning like Linda Blair in the Exorcist.

More the reason that end users will want and need a brandable, memorable domain.

The domain name space and the Internet is all about branding, standing out from the crowd, making a memorable mark regardless of extension.

On a personal note,  some have accused me of being biased towards the new gTLD’s because of my involvement in RightoftheDot.com which was founded in just 2011, although I own some 75,000 domain names, none of which end in a new gTLD.

I feel like I need to address this.

Personally I was perfectly happy if my domaining life continued like it did in 2004, 2005, 2006, etc when parking revenue was measured into the six figures every month, live domain name actions were measured in the tens of millions, not the one’s of millions.

I worked less and made more.

I could have done that forever and I would have been quite happy.

But the numbers are the numbers.

So you can either live in the past or try to make a proper assessment of what the future will hold.

Part of being a good businessman is being fluid; to assess news and developments, not only in the industry you’re are in, but in the economy and world in general and adjust your thoughts and plans as events warrant.

People change their positions based in change of facts and circumstances.

The world is consistently changing and blinding holding on to positions based on facts no  longer in existence is a fairytale.

Of course, many people will interpret the same facts differently and that is as they say that makes the horse race.

I remember when one of the hottest businesses in the US was pay telephones.

You paid to put a phone in a location or bought an existing location, and you would never have to worry because people would have to always make phone calls and a location that did $100 a day would always do $100 a day.

Well that didn’t exactly work out that way did it?

Throughout  the history of the world, those who have,  usually opposed change.

Its human nature to hold on to what we have, especially if what we have is valuable

However the only consistent in the history of the world is that the world keeps changing.

So now we are at the time where our  world of 22 TLD is about to expand to 522 or 1,022 or 2,022 in a few years.

It could be 2014 or 2015 or 2016 but it’s coming.

It’s not my decision.

I didn’t get a vote on it, but i saw it was coming in 2010 and decided I couldn’t afford to ignore the disruptive influence that the new gTLD could bring.

Although I had no idea how what my involvement would be in the new gTLD’s there was no doubt I was going to be involved.

Now as you see I wasn’t the only domainer checking out the new gTLD space.

Those domainers who are now trying to move into the registry business came to the same conclusion.

For them its an evolution rather an abandonment of being a domainer.

The biggest of new gTLD’s advocates wouldn’t suggest that .com’s will be replaced in total number of registrations by any new extension.

I have talked to almost every new gTLD applicant and I will tell you no one expects to see .com dethroned in their lifetime by a new gTLD, even all the new gTLD’s put together.

Yet that doesn’t have to happen for the domaining world to change.

However with 500, 1,000 or more new gTLD’s coming into the market backed by new companies, with new money, with different pricing options,  including possibly free domains, when you see people who used to be the biggest buyers of .com’s becoming registry operators, it’s just naive to expect business to continue as usual.

We have already gone through many versions of domaining as outline above and we will go through several more in just my lifetime and I’m an old-timer in this business.

It’s Domaining 6.0 and its all about branding; be it a .Com., .Me, .TV, .NYC, .Law, .Music, .Miami, .Poker, .Berlin. .Inc., or hundreds of other extensions.

If a domain is its intuitive and brandable it’s a winner, if not your running uphill against an avalanche of endless domain combinations.

Comments

  1. Johnnie says

    Eh, except alternative extensions have always been available and can you list how many Fortune 500 companies are not built on a .com? Can you go thru all your bookmarks and tell me how many .biz or .travel sites you have bookmarked?

    Timing plays a part in the marketplace, the battle has already been fought, .com won.

    You mention Schilling’s post, and when he was trying to make a case for the new extensions (flip flopping) he was actually making a case against them. Saying it takes big brands to move the market, except all the big brands already have their .com. When a couple tried, they failed. See Overstock and .co. See Budweiser trying out .tv and retreating back to the .com, points Frank made.

    There’s this myth perpetuated by people that it costs and arm and a leg to get a good .com. If we’re talking about 1 word generics, probably. But I see on Domain Name Wire every now and then blog posts about which companies are buying domains and you can see they’re getting them for low x,xxx. Or companies simply get creative and buy one for $8.

    Again, options have been available, ask yourself why businesses haven’t flocked to them? Maybe because they have a marketing department with people that actually know what they’re doing and understand something about branding. .com is already engrained into the public’s mind, it’s the easiest and most well known extension to build on. No company with a .com already is going to give that up and experiment with a new extension, unless they hired Overstock’s marketing team.

    These new extensions are alternative extensions. There battle will be against the already existing alternative extensions, .net, .biz. info etc. Not .com. It’ll just be sitting on top of the hill, enjoying the show.

  2. says

    Mike – exciting times, indeed.

    Maybe you overestimate the potential of brand to drive traffic, however. Plenty of people still see big brands and think “people look for them” without realizing just how much advertising those brands have to buy to drive traffic. Anyone looking to drive traffic is going to have to pay… one way or another, for the first no-one-knows-how-many years.

    And you didn’t mention Google’s control of search traffic. More than ever, Google expertly manages that flow of search traffic. What if Google says exact match still applies, but is weighted heavily towards dot com? Or more likely, Google sets the algo to track investment… more expensive domains benefit more, and free domains don’t get any? And if Google decides .gay gets to index and rank by virtue of name alone, but .web doesn’t unless heavily supported by audience engagement (e.g. links)? All likely, based on past Google behavior.

    The only constant is change.

    I like your Domaining 1-6 but I suspect the more profitable periods of domain marketplace were the ramping-up of the most stagnant periods: selling based on PPC revenues, selling ecommerce generics before Amazon ruled over ecommerce, selling EMDs to SEOs while the EMD bonus was real. The rest were highly speculative – with successes only visible in hindsight — as it is likely to be going forward.

  3. says

    Wow…Very nice post MHB. I agree with everything u said in this post…

    I am trying to sell-off ALL my domains ASAP.

    I’ve had a great run buying and selling domains since 2003.

    Looking for new ways to make money.

    Just invested 6 figures in an Internet Sweepstakes Cafe…it’s a legal casino…and the house ALWAYS wins!!!

  4. says

    The only 2 domains that will stand out are “BullS” and MarijuanaGuy dot com

    When marijuana is legalized, I will be the cartel and all of you …young and old need to buy it from me and all sites are “BullS”

  5. says

    As far as I am concerned the new extensions are just a bunch of hype and noise.

    There are already plenty of alternative extensions now and no one cares. Extensions like .INFO (8M) and .CO (2M) have a lot of registrations but hardly any awareness, usage, or credibility.

    Anyone can go online right now and hand reg a decent .COM for $10, or buy a better one (Two Word brand type) from a few hundred to a few thousand.

    How many times do products take off when they fill a need that does not exist?

    The people pushing these extensions all have a financial interest in them.

    The big money is potentially there for registries.
    A lot of money is going to be made by some and lost by others.

    Consumers are far slower to change and adapt than most “domain experts” realize.

    Brad

  6. says

    Hello MHB

    I just rolled out of bed at 2 in morning to check to see if my computer was infected, obviously lucky here.

    I am tired but could not resist reading fully your fine assessment above. A truly superb Virtual Business Foundation in the .Com Channel that is BRANDABLE as you say is the way to go. How the times have changed!

    Thanks for your efforts in giving us this LowDown,its excellent as usual.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

    Gratefull

  7. says

    MHB, Frank Shilling—you all have lots to lose if dot whatever is successful because both of you have lots of domains and will become pigeon shit domains.
    Oh well….

  8. Ben Elza says

    Excellent article. True, two facts stand up ; the internet is changing and most people fear change. Those who prepare for the change and don’t fear it, like you Micheal, are the ones who succeed because they SEE , ACKNOWLEDGE and REACT quickly, so they are always resilent winners.

  9. says

    I don’t know. Free web names are going to be fine for the mass people I guess or individuals, but for a company to brand under a free domain name and spend 10 or 20k on advertising each month could be a big mistake. In fact a huge liability.

    Getting something solid in the .com for say 50k would be a wiser choice.

    Question is what is that individual giving up to have that free domain name?

    The biggest unknown and issue is how will these new extensions apply to siri for search?

    What is apple going dictate with search, because they will be the first trillion dollar company and have more cash than probably the next 10 biggest companies put together in few years.

    Also with more extensions coming out it makes everything more worthless. It is like a stock that has just issued 10 more million shares thus further diluting shareholder value. >com will get more valuable because it has a trust factor. They where first to introduce the product just like apple was the first.

    JMO

    Donny M

  10. Aggro says

    One thing is for certain whenever a “will the new GTLDs affect dot coms” thread..

    Jeff “nutcase” Schneider & Mugford will be in the thread supporting .coms..talking AS IF they owned Tier 1 dot com domains.

    You can always tell the “quality” of a domainer by the company he keeps ie. what other domainers they has:

    90% is pure crap.

    Like:

    americanebiz.com
    hongkongebiz.com
    Dharmaebiz.com
    Askebiz.com
    bizdirlib.com
    ADVERTISINGEBIZ.COM
    AGELESSEBIZ.COM
    AMERICANEBIZ.COM
    ASTROLOGYEBIZ.COM
    BONANZAEBIZ.com
    maxiebiz.com
    popebiz.com

    Oh shit…that’s Jeff “nutcase” Schneider’s crap reg’d in yr 2000…Bwahaha
    Was that REALLY the best he could reg back in 2000?!

    As for Mugford…check out DataCube.com…hahaha

    I don’t see much .coms let alone quality .COMs…mostly a bunch of crappy .net, .bix, .info. .orgs, .us
    So why all the support for .COM!?

    These marginal domainers all talk AS IF the line of demarcation is above THEIR heels.
    Just like most people in a class think they are all “above average” (which is impossible)

    They all live vicariously thru the Top Tier domainers who own the truly great Tier 1 .coms

    These delusional domainers who will soon be pounded out of their “domaining for a living” fantasy back into their cubicle jobs

    You could have bought a 2 bed apartment in Manhattan or Central London 5 yrs ago – did nothing to it since – and if sold today would’ve doubled your money.
    That’s a big number, considering the price of property, even 5 yrs ago
    And had a better return than from domaining for 5 yrs..

    Whereas most “domaining for a living” types , at best, would have made the same return…after spending all that time buying, selling, fending off the $300 offers..

    Heck Sedo sells as much in a week by value ($1.5M) which is the price of a SINGLE 2 bed apartment in the swankier parts of Manhattan, London or Hong Kong. That’s what a SINGLE average real estate agent sells, never mind the total real estate brokers in the city or over a week.

    For most domaining will only ever be a slightly lucrative hobby (don’t forget the reg fees!), at best.

    LOL

  11. Mr.T says

    A fantastic article, Michael. It´s what we´ve been trying to tell people for years – brandable domains have slowly become more and more popular, and they´ve been reaching new heights year after year. We´re definitely excited about the times ahead :)

    Ben is correct when saying “most people fear change” – especially some of the people heavily involved in .com. The prime example are the guys who keep bashing new gTLD´s and every other extension because they don´t know about the nature of evolution, or because they are afraid of it. They´re so focused on the .com world that they´re missing out on everything else.

    I´ll say it one last time – the days when .com was the one and only are over! In some parts of the world .com never was king and never will be. .Me, .Tv, .Ly and other brandable extensions have already gained a lot of momentum and the fun has barely started.

    Then you have people like Anunt, who´ve realized that things may change bigtime in the future. He´s had a major change of heart about his .com analogy. I respect people like that. They investigate, they adapt. They don´t waste time crying while going down with the ship.

    People like Michael himself, who´ve invested in .Me, .Tv and other extensions besides .com because they understand what´s going on in the market.

    Adapting is part of evolution, it´s part of the game. If you don´t adapt over the years, you will fail!

  12. Brian says

    Aggro? The same Aggro from Domain State who tried to sell me his load of swine influenza domains? The aggro who lives with his uncle because he got fired from his job? LOL

  13. says

    .Co

    yes, let’s not forget the King.

    Its a bit bias of Elliot to leave the

    King out like that. not cool Elliot.

    .Co

    is the biggest of all and will be even bigger when

    500-1000 gTLDs come out because it is the only

    real meaningful, respected, and admired extension.

  14. says

    I wrote about this back in 2008, if you click the link in my name, you can read the article.

    As a background, I’ve been a ccTLD believer since 2007 and a self proclaimed extension agnostic since 2009, but even I don’t believe .com will be displaced within our lifetimes.

    There is just too much money invested in developing .com brands, no other extension will even come close for the forseeable future, in fact .com is the only brand even now where you can get by not including the extension in ads.

    There is money to be made investing in other extensions, specially for people who don’t hold tier 1 names in .com or any of the other gtlds like .net and .org but you’re right, the glass ceiling is around the $5k mark.

    If you’re buying .com domains above the $5k mark today, you better know what you’re doing, people still make a killing, see Elliot’s recent purchase and sale of CallCenters.com as an example, but not everyone can do it consistently.

  15. Michael H. Berkens says

    John

    .Co will have its place but lets not forget it branded the extension to mean company, corporation, etc etc and there will be a lot of new gTLD’s in competition with them for that space including .Corp., .Inc, .LLC, .GMBO

  16. Kevin says

    Who knows precisely what the future holds for domain investors?

    The key thing we do know certain is that CHANGE is guaranteed in all businesses.

    Change is important. It clears out the old and ushers in the new. It’s change that brings the dynamic cycles which create immense profit opportunities for those that see the new waves of change forming and ride them each time to the max.

    We also know certain that the Internet will continue to change, grow and be one of, if not the most important component of the global economy for our lifetimes.

    Trillions of dollars have been invested in developing, branding, advertising, and marketing Internet domains and websites over the past 17 years. And certainly trillions more will be invested in the decades ahead. It shouldn’t and doesn’t matter if .com stays the king or something else displaces it.

    At the end of the day, the bottom line is as investors and entrepreneurs, we can all be assured that the Internet will continue to provide endless and immense investment and business opportunities of every kind and size, be they buying domains for X and selling for Y, or selling services, or anything else that can be innovated and marketed.

    Seriously folks, you have to be a really pathetic investor and businessman, if you can’t find a way to make money off the Internet year after year. It’s the most incredible, vast and exciting goldmine ever created.

    If you can’t deal with change and the neverending risks that are a part of being an entrepreneur and Internet investor, then you shouldn’t be in business in the first place. Hang up the entrepreneur career and go work for someone and be content with a guaranteed paycheck every week.

  17. fizz says

    Excellent post Michael, very thought-provoking.

    >>What happens to the $10K domain NewYorkPersonalInjuryLawyer.com when someone can register NewYorkPersonalInjuryLawyer.Web for free?<<

    Well after someone registers that free version, and other lawyers grab the rest (NewYorkPersonalInjury.Law, NewYorkPersonalInjury.Lawyer, NewYorkPersonalInjury.Attorney, NewYorkPersonalInjury.Esq, NewYorkPersonalInjury.Legal, PersonalinjuryLawyer.NYC)…Let the Confusion Games begin.

    And one really smart lawyer will gladly purchase NewYorkPersonalInjuryLawyer.com to rise above the confusion.

    I can't wait for tens of thousands of new TLDs to launch, and if half of them are free, even better.

  18. sem says

    An incredibly insightful post. When the guy who sells the most .com and has been the biggest proponent of .com over the last 10 years starts buying 60 million in registries, one has to take heed. I have also liquidated a lot of domains that are not “brandable” even though the keywords are pretty good. With 1000 new tlds, there are too many available combinations of good keywords which you have astutely pointed out. Branding will be the only way to stand out in the future. The best brands will have a keyword in the domain and something catchey or intuitive along with it.

    I think type-in traffic will continue to be big. Half of people will always type in a generic for what they are looking for (ie lawyers.com). However, the future of “domaining” per se, lies in the “brand” realm. Your meet.me case in point. Intuitive and a good brand.

    So in the future, either someone can afford the exclusive type-in keywords or you will be good at picking brand names out of the plethora of TLDs.

    The days of combing through mediocre keyword .coms to register or for resale on the aftermarket are over. No one wants them.

  19. fizz says

    >>Your meet.me case in point. Intuitive and a good brand<<

    With all due respects, it was a defensive purchase. Type in meet.me and see where it goes.

  20. says

    “If a domain is its intuitive and brandable it’s a winner, if not your running uphill against an avalanche of endless domain combinations.”

    That says it all regardless of the extension. (But you still better have the .com counterpart)

  21. BrianWick says

    “Google algorithms change like the wind”

    correct and non.com’s (oops new gTLDs) are only as brandable as SEO algorythms – no matter how ,tv, .co and new ones like .shop, … are marketed.

    sure non.com’s create countless more intutitive business addresses – but they will never be self-marketing, self-promoting and self-advertising like .com – no mastter he bullshit “networking” crap that is promoted by the likes of .tv, .co and others.

  22. sem says

    Another thing to consider that totally validates your point is the “trillion” registerable domain thing. With the new TLDs there will be literally trillions of keyword combinations and brand combinations available. Lots of naive domainers will go about buying hundreds of keyword combinations that they will think someone will buy. This will not be the case. Good for registries but bad for the poor domainer. People will be more selective about choosing their “brand” to develop on.Even what we consider mediocre to good .com at the moment will fall by the wayside.

    Instagr.am and meet.me are great examples. People want to develop on them, exclusively as brands, so these are the domains they buy for whatever price.

    Domaining as we have known it is really over, and part of me is thankful that I won’t have to look at people trying to sell 1000s of domains that aren’t “intuitive” but have false hope written all over them.

    Domaining, for most, is worse than a lottery. At least in the lottery you find out in a couple days time that you didn’t win and then you throw your tickets away. With domains, you have a year registration, and then you can become attached and keep re-registering. This is the plight of 95% of domain portfolio holders. But this will change,hopefully, in Domainer 6.0, as you’ve called it. On the other hand, it might even get worse. Hard to say.

    Hopefully the new domainer will register or buy in the aftermarket wisely, not with speculative intent. This never works.

    Understanding brands is the way to go, IMO.

  23. says

    We made 2 bids this year for domains that sold for well over a million USD, also I brokered 4 domains in the range of 100K USD to startups that needed their .com extension (one had .net, 1 had .de and 2 just included “inc” and dashes in the name.
    The DDF sold 3 names only in May and June in the range of 50 to 100K USD.
    All of the sales are under NDA and my feeling is that more and more sales are under NDA these days for many reasons (taxes, commissions, more attention from outsiders etc.), so I would not judge the market with the little information available from reported sales.
    But I agree there will be some changes to the industry….

  24. Michael H. Berkens says

    Mike

    There is no doubt that there are many sales under NDA.

    I’m not sure if the percentage is higher than 2010 or 2011 we can only go by what’s reported

  25. cm says

    what about how the new web browsers are getting better at auto completing.

    Type in 2 to 3 letters and it already shows the most popular selections.

    …thus not only is right of the dot becoming less typed, right of the first few letters are becoming less important to type

  26. Leopold says

    Would you spend 20K right now to buy a diamond ring for your wife on a .biz domain? How about a .info? What about .shop?

    Do you trust .biz and .info right now enough to spend 20K on a site on it? There’s your answer for .shop.

    Free = Cheap. If the new TLDs become full of sites like nail salons, cheap Chinese plastic trinkets, barber shops, and your uncle Jimmy’s home page, then the extensions will come across as cheap. Imagine if you visited 50 pages in .shop only to have 40 poor experiences. Do you think the surfers will continue typing in that TLD? Will it be trusted?

    Add me to the blind, old .com camp. I think right now is the best time in almost 10 years to invest in .com and hold to your beliefs (if you have good .com domains).

    The new TLDs will be initially adopted by site builders to a large degree only to be shunned later as they realize how much of their marketing dollars are being wasted.

    You simply cannot expect folks to remember dozens, hundreds, thousands of extensions, no matter how intuitive. Just look at the current confusion with .net, .org, .co, etc….. Try building a six, seven figure brand on those and see if you don’t have everyone going to the .com. Granted, people can get around this by buying the .com and redirecting, but that’s what they will have to do, and obviously this will show others the Achilles’ Heel of the TLDs.

    Also, doesn’t anyone think the Overstock example of O.co losing traffic to O.com is a weathervane? It seems like this example is already being forgotten.

    .com is sitting prettier than it ever has and I’m tickled pink by the launch of TLDs. I only see money coming my way from this.

    Sincerely,
    Clueless, defensive, blind and stubborn, old 90′s domainer :)

  27. Leopold says

    One other thing I wanted to say regarding those domain sales figures.

    We are dipping back into another recession right now. I think that many business folks began sensing the slow-down again earlier this year and have closed their wallets to a degree. People are smarter now after the last crash and are making preparations to weather the next storm.

    I sensed it three months ago and started saving more than I was spending to get out in front of it.

    This is affecting domain sales in 2012, IMO.

  28. cm says

    type o. into one of the new browsers

    it will suggest:
    overstock.com
    o.co

    not even showing o.com ….because they are getting better at what they are intended to do…get you to where you want to go

  29. says

    It is time to wake up people!

    Yes, domaining as we know has been over for a while. The easystreet is over but the business is still sound, if applied soundly, like any business.

    The easysteet is gone, erm, … unless of course you are a major corporate with staff lawyers who make it possible for you to abuse laws which the man in the street has to adhere to. (Like, YouTube, Google, Facebook, etc.)

    I have a major problem with allowing a corporate to take ownership of .book, .search, .blog, etc etc. Those are generics that belong to the public domain! I believe, like the .com, being manage by a company which is awarded the franchise, many of these generic gTLDs shoudl be managed the same way!!! There is a reason why you cannot trademark a name that is already in the public domain… why should this be different?

    Will Amazon now become the custodian of our libraries with .books? Can we trust them to manage it sensibly for everyones benefit? NO No No!

    Wake up people, apart from less than 1%, you are NOT going to make money out of gTLDs! It will however cost you loads more, even if you are not a domainer….

    When my child grows up and surf’s to whatever .book, she is going to assume that is the de facto authority and custodian of books!

    It is time to speak up.

    .. I previously said this whole gTLD thing sounds like something cooked up by lawyers to keep themselves employed for decades…

  30. Leonard Britt says

    With more than 100 million .COM registrations, the brandable keyword opportunities in extensions other than .COM far outweigh what one finds in .COM. Understandably the aftermarket is very .COM biased. However, acquiring quality .COM domains at Namejet/Snapnames/etc is intensely competititve. You have a fighting chance going after a decent keyword in alt TLDs. On the other hand, alt TLDs get little type-in. Many people reject alt TLDs regardless of the keyword. But we are starting to see limited adoption of some alt TLDs and short alt TLD domains may present a limited opportunity. Note I am not referring to every alt TLD.

  31. says

    I don’t know what the gTLD’s will bring but I do have a question about how Frank Schilling is approaching them. I’m a nobody to question the greatest domainer of them all but would it not have been better to invest the $60M into 2-5 killer gTLDs like .web, .sex, .inc, .ins, etc, than the 50 so-so .blackfriday’s, etc? $60M is double or triple what ICM paid for .xxx. It’s comparable to owning one great dotcom vs owning 50 mediocre ones. I get that he’s trying to diversify his holdings.

    Also, I’d like to second Leonard’s post. It is a great time again to buy dotcoms. Names like LinoleumFlooring.com going for $1k on Snapnames and CNCLathes.com for $170 on NameJet are steals and they’ve been happening fairly often this year.

  32. Logan Von Wolff says

    I think a lot of you are missing the point of this article. Change is coming and while the new gTLD’s are gay, most new start-ups are looking for brandables to make their home. Dot .co is doing a great job at marketing to this crowd. Dot .me and dot .tv are also great alternatives. Yes, we all know that .com is king blah, blah, blah but at the end of the day if all the dot .whatever’s are available why is someone going to pay high dollar when they’re trying to bootstrap? Marketing from the registrars will be a key factor. If others are as clever as dot .co and dot .me, then it will ultimately dilute the .com when dot .crap rear’s it’s ugly head.

    At the end of the day everyone will need to polish their portfolio and hold on to the best dot .coms and drop/sell the rest. Dot .com king is still king as the old farts always say but the king will eventually be dethroned by the peasants pissed off at his rule.

  33. Tom says

    I made a half dozen sales over $10k via NDA direct end user, which I did not report, they were for .com’s registered between 2000 to 2004 which most domainers would mot likely pay more than $100 for.

  34. says

    @ AGGRO

    I let loose of a lot of those names , knowing they are targeted and Brandable to those lucky enough to get the drops! Just a GIFT to those with Eyes Wide Open.

    “Give what you covet and the skies will open up to you”

    Thanks for the coverage AGGRO, Peace be with you.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  35. says

    Nice historal summary on domaining. I enjoyed reading it.

    “So where do we go from here?”

    It’s not like aftermarket sales and PPC are the only monetization methods available. There have been other methods available for years. It’s just not as easy as those two.

    I always advise people to at least take their best domain name, develop it out and learn how to live off the revenue. It may take an adjustment; such as learning new entrepreneur skills but it can provide the revenue needed.

  36. RK says

    @ Anunt

    You should have invested in “Social Casino”.

    @ Samit

    I agree that doesn’t matter what, it is just impossible to displace dot-Com within our life times.
    Their may be some occasional other TLD examples (like MHB posted in the article) of selling for good prices but it will be very limited.

    I just can’t wait to see the new gTLDs launched because it will be so much fun to watch this soap opera.

    @ Aggro

    It is always great if you can keep your mouth shut because the only thing you know is how to attack other people. You are a very bitter person who obviously can’t sleep if he doesn’t go after someone. Try to talk about the topic, and not attack others. Today you picking on Jeff,and tomorrow it will be someone else.

    How come you don’t pick on me anymore?
    Is the trailer of your misdeeds that I showed you too much to handle?
    Oh btw, I have the whole dossier so be careful when you attack next time.
    Man, I finally lost my patience with your attacks.

    Just hoping that someday God will bestow wisdom on you :)

  37. says

    Perhaps now you see why being in Europe has its advantages, Mike. This is a very thorough, well-researched, original post that’s classes above regular articles about Marchex stock fluctuation or NAF decisions. Job well done.

  38. domains says

    @Tia

    Direct navigation and ppc income is the way to go. Or Url forwarding.

    Some of us are proud to pure domainers

    We all ready seen whats going on development this, develop that. Over rated!

  39. Tom says

    @Anunt

    I am sure they are more than one Tom’s out there, and the fact you still use myspace just shows how out of touch you are my little monkey friend.

  40. Dean says

    MHB,
    Let’s bring this whole topic down to reality, shall we? The true beneficiaries of the introduction of the gTLD’s and the one’s banging the drum the loudest for their approval are the big players. Frank Shilling: sixty plus new extensions, Yourself and Monte: Right Of The Dot, Rick Schwartz: has pretty much been mute about the subject, but certainly has the resources to cherry pick the top domains from any new extension introduced. Other big players, etc,. So as in any business model prior the adage “it takes money, to make money” is ever so true.

    There is a huge class divide here, You address you blog audience as if most where in that top category, while I would guess that less than 1% of your readers has the resources to truly capitalize on these new opportunities that will be presented with the introduction of the new gTLD’s. Let’s keep it real shall we MHB?

    You did address my question, or rather you glossed over it. Is it not true that ROTD stands to make enormous sums from consulting, and that you and Monte are actively courting any new potential applicants. Would that not constitute an agenda?

    I don’t begrudge You or anyone else for going after those opportunities, I would do the same given the chance, but let’s be upfront about it, not hide behind some veneer, that it’s solely in the name progress or good of the internet.

    I have never stated that I am against the new gTLD’s or that we should not move forward with it. Progress in inevitable. I think there will be opportunities for the little guy’s as well, but anyone vying to make money off the new spaces that has little capital, better approach it with trepidation and cautiously. While many will fail (both big and small) in the new spaces, it will present opportunities for everyone, but the real winners will be those who take the largest risk(s).

  41. L says

    The most intuitive and brandable component of a domain name is the .com part.

    It will be interesting to see if this moves the mountain.
    It might. It’s definitely ‘big enough’ in scope to eventually develop into something that beats .com out of minds of consumers. For that to happen, it’s going to require brands to seriously develop and advertise them. I haven’t been paying attention to the applications but have the premier brands been applying for .them? That’s the mover, not what some turd domainer speculates on. Just as nobody takes .net seriously, we may arrive at a time when your status as a ‘big boy’ or ‘player’ is having your own vanity TLD.

    You want to get a better handle on this, ignore domainers and marketers alike.
    Bone up on phenomenology.

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